Although this may come as a surprise to many, progress has been made in Brexit negotiations in 2018, most notably an agreement on the principles and timeframe of a transition period. However, legal certainty on this and the future relationship between the UK and the EU will not be achieved until the final Brexit deal is ratified.
And it is that final (and crucial) stage that now lies ahead…
The finishing line is in sight, but hurdles remain in the way of withdrawal agreement being legally adopted. The key issues to be resolved are the Irish border and the role of the ECJ in governing the agreement. In particular, the juxtaposition of government’s red line on leaving the customs union and its insistence that a hard border cannot be imposed in Ireland remains a significant barrier to any deal. Solutions to both issues have proved elusive ever since Brexit talks began last summer and the outcome could hinge on a mutual willingness to compromise.
Before the customs union question can be answered, the Irish border conundrum must be resolved. As the only part of the UK to share a land border with an EU country, leaving the customs union would ordinarily require a hard border being established between Northern Ireland and the Republic of Ireland. However, for various reasons concerning peace and a perceived threat to the union, the UK government is adamantly opposed to such an arrangement and, despite proposing free trade and technological solutions, the EU has so far rejected them out of hand.
Businesses have been somewhat reassured by the progress made in the talks this year, but most have contingency plans in place should negotiations break down and some have triggered these already. According to recent business surveys, companies are more optimistic than previously about the eventual outcome. However, the key point that UK and EU businesses will be concerned about is a future trade agreement. The suggestion that the UK parliament would insist on the UK staying in the customs union appears to have diminished, although it would be foolish to discount the possibility of this happening entirely.
General, albeit reluctant, acceptance has set in among the EU 27 that Brexit will not reversed. Negotiations will now intensify to tie up the withdrawal agreement and confirm transition arrangements this autumn, ahead of the ratification process. It will be increasingly difficult, some say impossible, to reverse the decision beyond that point.
From an EU perspective, with the focus turning to a future trading relationship with the UK, the continued unity of the member states in their negotiating position will be of paramount importance. Much like the UK, each member has its own economic priorities that they will want to push.
So, as we enter the final stretch before the UK officially leaves the EU and begins a transition or ‘implementation’ period, the Brexit waters appear as muddy as ever. Although a good deal of progress has been made in recent months, the remaining sticking points are considerable in their gravity, if not their number.
Article published: 28th August 2018
